Affective dysfunction has been recognized as a major deficit in schizophrenia, and flat affect is a prominent negative symptom, presenting a challenge for treatment. Our efforts in the current project have advanced the understanding of emotion processing deficits in schizophrenia through convergence of clinical, neurobehavioral and structural and functional neuroimaging methods. Our results underscored the importance of flat affect in adversely impacting course and outcome. They suggested that the interaction between limbic and prefrontal regions could underlie both emotion processing and some cognitive deficits. Our current study has also revealed substantial deficits in emotion processing in unaffected first-degree relatives of patients, and the renewal application proposes to study a group of unaffected siblings. Advances in neuroscience provide unprecedented tools to probe the neurobiology of emotion processing in healthy people and reveal with increased precision mechanisms that could be responsible for dysfunction in people with schizophrenia. The goal of the proposed competing renewal application is to build on current findings and focus on functional MRI (fMRI) paradigms to examine emotion processing in people with schizophrenia and their unaffected siblings. In the proposed study we will perform two experiments, both using a sparse event-related design that can isolate neural systems engaged in top-down emotion categorization tasks from those responding to threat related facial affect. In the first experiment we will test the hypothesis that abnormal bottom-up amygdale response to facial affect is especially impaired for fearful expressions, and contributes to misinterpretation and possibly failure to process affectively valenced stimuli. We will confirm our findings that this abnormal amygdala response is strongly associated with severity of flat affect and adversely impacts course and outcome, and examine the effects of gaze direction on limbic activation. The sample size for this experiment is powered to examine potentially modulating effects of anxiety, basal cognitive and emotion processing abilities, sex differences, and ethnicity effects. In the second experiment we will examine variables that could modulate the abnormal amygdala response to threat related facial expressions. We will examine the contribution of stimulus parameters by manipulating information conveyed in facial features. Specifically, we will determine the effects of changes in upper or lower face, and familiarity by using photographs of facial affect displays obtained from people familiar to the participants. In both experiments, incorporation of a recognition task will permit linking limbic response to the likelihood of correct face encoding. The application of a genetic strategy, by studying family members with the neurobehavioral and fMRI paradigms, will permit the integration of two powerful research strategies in schizophrenia - genetics and behavioral neuroscience - needed to assess vulnerability. We expect the results to shed light on mechanisms for affective dysfunction in schizophrenia that can lead to improved identification of vulnerability and treatment.